Retrospective consent or indemnity policy?

[Bunny44]

I'm looking to buy a house which has been substantially redeveloped 4 years ago by the current owners. The searches surfaced restricted covenants on the house owned by neighbour at the rear. They had once been on the same plot but it was divided up. The restrictive covenant says that the owner shouldn't make any alterations or additions to the external appearance of the buildings without obtaining the written consent of the seller at the time of the 1980s transfer of land (the rear neighbour).

It seems that the current owner did not ask the current neighbour's consent, but the neighbour is a builder and they were aware of the building works and even did some of the work on the property I'm buying.

We pushed the seller for retrospective consent but they are pushing back and offering to pay for an indemnity policy. My solicitor wants to continue pushing for retrospective consent but it seems, from speaking to the seller, neither he nor the builder neighbour were aware of the restrictive covenants and the seller is wary to poke the sleeping bear as such...

That said I'd be surprised the builder neighbour wasn't aware as he himself has to pay out to another neighbour due to restrictive covenant breaches when he developed his house.

Part of me is also wary about bringing it up as the restrictive covenants are quite extensive and says things like not to keep birds when we'd like to bring our chickens (for example).

I think I would be happy with an indemnity BUT I would be wary of a builder who has had to pay out for another breach. It would make me wonder if they had been robust on getting appropriate planning and building regs for your development.

I think if all planning is on portal and has been approved and the build followed regs then that would be enough of an assurance. We had similar, except our house was the one with the covenant (from the 80s) We just made the planners and neighbours aware but it was approved anyway so the covenant seemed moot. I would say consent would be implied if it was your neighbour who helped with the build.

As he is still alive and lives nearby I would want retrospective consent. It would be a relatively easy thing to do and you would have it ready for when you come to sell. Has your solicitor received all the relevant planning/building regs consents for all the works?

So the builder is the neighbour who the seller would need consent from (from what I understand). The planning permission is clear, above board and approved, it's just in relation to the restrictive covenant, it does specify written consent and says it applies to subsequent owners too on both sides, and this wasn't obtained.

Yes all the planning and building regulation consent is there. Just not the consent from the neighbour. I think the seller thinks the neighbour will make him pay money for consent, seeing as the neighbour already had to pay out £20k to another neighbour for something similar.

I am concerned it's an issue when I come to sell too if we don't have it.

The only problem would be if he says no you may not be able to get an indemnity policy.

if the builder neighbour is now already aware of the covenants then indemnity insurance might not work ? standard indemnity only works if the original party has not been made aware of the alterations , i think ? your solicitor might be able to get you a bespoke quote, seems as the builder (With the benefit of the covenant) carried out the works ?
sorry if ive misinterpreted

Yes that's what I've understood - the builder with the benefit of the covenant carried out some the work. He's well aware of the alterations but potentially not aware that he benefits from the covenants. Or potentially they had some agreement between them if they're on friendly terms (the builder and the seller).

From what I'm aware you can get indemnity insurance as long as there hasn't been a dispute already raised. The seller has provided a quote for a policy already but my solicitor wants us to push for retrospective consent.

Your solicitor will be acting in your best interests (should be ) . as one of the neighbours has already paid £20,000 for restrictive covenant consent, i would be careful .

Retrospective consent or walk away.

I am considering this to be honest. Does anyone know if retrospective consent can take a long time?

If the builder is agreeable, it shouldn’t take long. It’s in the sellers interest to get it sorted as if you don’t buy it a future buyer’s solicitor will pick it up.

I agree, you need the retrospective consent. Your solicitor is right to push for it and it won't cause a big delay.
It will cause a problem again next time the house is sold. Get it resolved.

Entirely dependent on the owner of the covenant and the two solicitors.

Indemnity. We have just bought a house where they did work, didn't get regs, then when the searches came back they got the council round for retrospective who the made them build a wall cos they didn't stick to the planning permission given. Them telling the council invalidated our (any anyone else's ) mortgage and because they had told the council we couldn't get indemnity. It was a nightmare. (And should have been a warning of what was to come!)

It took 3 months for us.

But this is restrictive covenant indemnity not planning @Ivygarland and you were dealing with the Council. This is a private individual who lives nearby. It really shouldn’t take too long if all parties are in agreement.

Yes was about to say this but you got their first - think it's different if council planning was not obtained.

The seller is refusing to budge. Their solicitor says they are not prepared to take the risk of obtaining retrospective consent, because if there are any issues with this, they will not be able to obtain indemnity insurance. They claim the indemnity policy is sufficient cover. They do have a relationship with the neighbour but are being advised by their solicitor on the off chance they refused to engage then they won't be able to get an indemnity policy.

I would guess then, that means the neighbour definitely isnt aware of the covenant - and that its possible they may push for compensation once aware.
Do you really want to be in that position yourself as a seller when you come to move again ? I know I wouldn't.
Most indemnity policies also become invalid, not only if you make the beneficiary aware of the breach - but also "contacting" them becomes a grey area that can result in an invalid policy. I like to retain the flexibility to contact, or not contact, all my neighbours personally.